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MAHONING VALLEY ECONOMY Recession? Yes, no, maybe



Published: Mon, June 11, 2001 @ 12:00 a.m.



Local counties are in a recession as their manufacturing plants struggle, a researcher says.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

HE MAHONING VALLEY economy is performing worse than any other area in Ohio, one expert says.

"There's no doubt the Mahoning Valley is in a recession and has been since last fall," said George Zeller, senior researcher for the Council for Economic Opportunities in Greater Cleveland.

Zeller, whose group runs anti-poverty programs, makes his diagnosis based on economic numbers released recently by the Ohio Department of Job and Family Services.

Declining area: The northeast corner of Ohio is the only part of the state with four contiguous counties that had earnings declines of at least 7 percent in the fourth quarter of last year.

The amount of money earned by all workers in the Mahoning Valley that quarter was $1.7 billion, which was 9 percent less than inflation-adjusted numbers for the fourth quarter of 1999.

The declines by county were: Mahoning, 7 percent; Trumbull, 11 percent; and Columbiana, 7 percent.

The fourth local county with a large decline was Ashtabula, which had a drop of 8 percent. The state average was a decline of about 4 percent.

Earnings numbers for this year aren't out yet, but Zellers said he expects them to be worse based on high unemployment claims.

Both Trumbull and Mahoning counties are among the counties with the 10 largest increases in unemployment claims this year. Zellers said the triple-digit increases all of these counties have are astonishing. The state average was 64 percent.

Unemployment: Trumbull County was fourth with an increase of 192 percent compared with the same period last year. Mahoning County was 10th with an increase of 122 percent. Columbiana was 24th with an increase of 86 percent.

Zellers said he can classify this as a recession because the economic decline lasted two quarters.

Reid Dulberger, executive vice president of the Youngstown/Warren Regional Chamber of Commerce, said he can't call it a recession, however. Recessions in a region are judged by gross regional product -- the total of goods and services produced -- and that data isn't available for the Mahoning Valley, he said.

He said he isn't willing to substitute the earnings data for the gross regional product to determine a recession.

The earnings numbers do show, however, the local economy became soft at the end of last year, he said.

The weakness mostly came from a slowdown in manufacturing, he said. All of the area's major employers have been struggling.

Demand slowed significantly last year for local steel makers CSC Ltd. and WCI Steel. CSC filed for bankruptcy protection in January and closed in April, resulting in 1,300 layoffs.

Also, Delphi Packard Electric Systems was laying off hundreds of workers temporarily each week at the end of last year and early this year. General Motors' Lordstown Assembly Plant had to shut down for a week twice this year because of weak demand for its cars.

Those companies were affected by issues specific to the steel and auto industry, but other manufacturers also were affected by the slowdown in the national economy, Dulberger said.

"We expect to regain jobs when the national economy turns upward," he said.

The number of jobs in the valley is running at about 244,000 this year, which is about 4,000 jobs less than a year ago.

Manufacturing declines: Both Mahoning and Trumbull counties had large declines in earnings in manufacturing in the fourth quarter. Mahoning's manufacturing earnings declined 16 percent and Trumbull's declined 18 percent.

Slow growth: Tony Stocks, economics professor at Youngstown State University, said the Valley continues to struggle because of its dependence on steel and auto, which are not fast-growth industries.

To grow, the Valley has to find a way to add jobs in other industries, he said.

The Valley has diversified somewhat, so it's unlikely the current economic struggles signal a return to the crisis of the early 1980s, when much of the local steel industry collapsed, he said.

Development at the Youngstown-Warren Regional Airport is one possible way to grow the local economy, he said. Luring high-tech companies and growing fledgling high-tech companies have been discussed but not much has happened, he said.

"We've seem to have a lot of smoke but no fire," he said.

shilling@vindy.com




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